Condemnation / Easement Appraisal

[JAM]

Hello Appraisal Forum Members! I am doing a private appraisal for an attorney. His client is having part of his land condemned by the county to extend out a busy road they live on. I have been provided a copy of the narrative report from the county. The county does not go into the details of why this is a detriment (naturally) for the home owner. The home owner's position where the subject property is located is closer to the busy street (it's a 1.17 acre lot (roughly a 75' x 660' long and narrow lot). A couple of questions: how would the market reaction value be determined? Obviously, the lot value does not come close to how the property is negatively affected from the loss of the land. This is not easily attainable from a sales paired analysis as all of the homes on that street are not as close to the road and now more so with the easement (extension of the road) taking place. Also, does this merit putting on a narrative like the county did or should I attempt the sales comparable analysis using a form with the grid, cost approach, etc.? Has anyone done an assignment like this before? Some words of wisdom and expert advice would greatly be appreciated. Thank you!

 

[hastalavista]

It sounds like you haven't done this kind of assignment before.
If that is true, the best advice you'll get is to hook-up with someone in your market who is familiar with partial takings and the valuation-analysis and reporting-requirements/expectations for such assignments. You can get some general information here, but that is going to be inadequate to get you up to a competent level.

Good luck!

 

[JAM]

It sounds like you haven't done this kind of assignment before.
If that is true, the best advice you'll get is to hook-up with someone in your market who is familiar with partial takings and the valuation-analysis and reporting-requirements/expectations for such assignments. You can get some general information here, but that is going to be inadequate to get you up to a competent level.

Good luck!

Thank you Denis DeSaix! Yes, definitely understood---I am hoping there is someone on this forum who has done assignments like this before I commit.

 

[Sid Holderly]

If it puts the house out of compliance with setbacks damages to the improvements may be substantial. Future additions or rebuilding from a fire or storm damage may require being brought into compliance. (a variance or moving the house an extreme). A narrative will likely take less time than adding needed addenda to a form based work. Get a copy of the local zoning code and read then go to the area plan (or zoning board) and ask questions on setback, build-back and variance possibilities. Interpretation of the codes changes depending on who is in charge at a particular time.

Lot part generally easy, temporary damages, damages to improvements and aesthetics takes time.

 

[Pittsburgh Pete]

If in fact the property is hurt more than the value of the land being taken, you will need to do a "Before" and "After" analysis to determine the damages to the property.

Severance damages to the remainder may arise from the reduced setback (and possibly making it non-compliant with current zoning). The best approach is to find properties on similar roadways and compare the values relative to setbacks from the roadway.

Good luck.

 

[Peter LeQuire]

Also, (at least in this state) compensation for partial takings is a matter of statute, and the determination of allowable comp is not simply a matter of dueling experts.

 

[Pittsburgh Pete]

Also, (at least in this state) compensation for partial takings is a matter of statute, and the determination of allowable comp is not simply a matter of dueling experts.

What does " compensation for partial takings is a matter of statute" mean? Also not sure what you mean by "allowable comp(s)"?

Sorry, it's late on Friday afternoon.

 

[JTip]

you will need to do a "Before" and "After" analysis to determine the damages to the property.

Just looked at six of these for the next project (50+ claims).

Job security.

 

[Michigan CG]

.............The county does not go into the details of why this is a detriment (naturally) for the home owner................

A taking is not always a detriment to a property; sometimes there is no affect on value and sometimes there is actually a gin in value. Keep an open mind going in.

Typically the people doing this type of work have specialized education and in many states they have certain ways this is supposed to be done which can be very different from the adjoining state. Many times there is an accepted methodology for this type of assignment.

Most appraisers you might be challenging will be CG appraisers, many with alphabet soup behind their names. Be cautious my friend that you know what you are getting into.

 

[Mark K]

I do these frequently since about 80% of my work is for r/w acquisition, roads, sewers, power lines, walking trails, etc. Many times the current owner is convinced that his property value is adversely affected when, in reality, he's the only one convinced.

Some of the questions you need to address:

1. What is the typical setback for the area, street, and age/type of house?
2. How far is the setback being reduced? If most houses on the street are 50' from the road and the subject is 100' and they are all losing 25', the house 100' back is likely not going to be adversely affected.
3. Is the project affecting the well or septic, if applicable?
4. Will there be adequate parking when the project is complete?
5. Will the lot and/or house comply with zoning 'after' the project and what is the local authority's opinion on legal or grandfathered houses in this case? Will they grant an automatic variance if the house/lot is now non-compliant?
6. Are there setback damages only to the house or is the lot also being damaged?
7. Are municipal water and sewer and storm sewers included in the project and will their presence/availability offset any or all of damages?

Most r/w appraisers establish a r/w setback loss factor based on matched pairs, i.e., similar house sales in the area, one close to the road, one not so close, ideally they are about the same as the subject in the 'before and after'. Others use studies that are fairly in-depth and reasonable; I do it either way depending on the desires of the client.

You say that ..."Obviously, the lot value does not come close to how the property is negatively affected from the loss of the land..." How do you know and how have you proven this? If you go to court you will have to PROVE it. You sound like an advocate instead of a disinterested third party. Sometimes being closer to a wide, safer street more than offsets the perceived loss in value (at least in the eyes of a typical buyer). Many times the properties along a newly improved road increase in value because the road is now much safer, especially if sidewalks are part of the project. I've had owners crying and yelling about the fact that the project will '"destroy my property value" when in reality, the market often shows via area sales before and after the project that there were no damages at all and in fact the property values increase.

I would strongly advise you to contact your local International Right of Way Association and hire an appraiser as a mentor if you're determined to see this through. Better yet, tell the attorney to hire the r/w appraiser and see if you can go along and help for the experience.

If you end up on the stand, and its very likely you will in a case like this, you may end up wishing you'd passed this assignement on to someone else. This type of work requires specialized competence and not having it could be construed as a USPAP violation. Around here, the state and county frequently send faulty r/w appraisals to the appraisal board for review and dicipline when an inexperienced appraiser wanders into these strange waters, mucking up and delaying a road project.

Good luck!